Torts I, Pages 323–325

Overseas Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., Ltd. "Wagon Mound No. 1"

Privy Council, 1961

Facts:

Plaintiff operated a wharf for shipbuilding and ship repairing in Sydney, Australia. Defendants' ship, Wagon Mound, was moored 600 feet away. While taking on a load of furnace oil, the crew negligently left a valve open, causing the oil to spill out onto the water. The oil caused minor damage to the plaintiff's wharf, but plaintiff made no claim for it. A few days later, the oil was ignited when floating cotton waste was set fire by metal dropped from the wharf from plaintiff's workmen. The fire seriously damaged the wharf and two ships docked alongside it.

Procedural History:

The trial court found that defendants "did not know and could not reasonably be expected to have known" that the oil was capable of being set afire when spread on water. Judgment was given for the plaintiff. Judgment was affirmed by the Supreme Court of New South Wales.

Issue:

Is plaintiff liable for negligence if the damage was not reasonably foreseeable?

Reasoning:

It is not fair to hold someone liable for all consequences of their actions, no matter how grave an unforeseeable they are. Liability is based on the damages, not on the act. Nor would it be fair to hold liability for unforeseeable damages only if some foreseeable damage resulted as well.

Rule/Holding:

The damage must be reasonably be foreseeable to hold one liable for it.

Judgment:

Reversed and dismissed.

Takeaway:

A person is only liable for harms resulting from reasonably foreseeable risks that made the actor's conduct tortious.

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